Thinking (about Procurement) Fast and Slow with Daniel Kahneman

Procurement is a relatively non-academic and unscientific “profession.”

It lacks the regulatory basis of accounting, or a body of knowledge that is clearly laid out, agreed and codified as the correct way of doing things. It lacks the direct measurement of sales and marketing; we may not consider these business functions are particularly scientific, but actually they provide their disciples with direct ways of measuring the benefits of what they so, through metrics such as market share, customer awareness or simply sales figures. The tangible nature of those results means that classical scientific experimentation is at least possible in these areas. The Brand Manager can try controlled alternative approaches and actually measure which one works best.

Procurement has very little in the way of scientifically proven best practice, and not really very much even in terms of academic underpinning to what we do day-to-day. That is in part because many key procurement activities appear highly subjective and are linked to behavioural skills and issues, which are harder to analyse and study than fact-based actions. Such “soft” activities include negotiation, relationship management, and even arguably risk management.